Intel Has Lost the Mobile War to Qualcomm

In his 2012 letter to shareholders, Paul Otellini, then Intel (NASDAQ:INTC) CEO highlighted his company’s “mobile edge.” At the time, Intel chips were installed within six different smartphones, which included the Lenovo K900 and Safaricom Yolo. Otellini also went on to laud Intel’s prospects for growth within the “2-in-1” market. Intel and Otellini then defined Windows machines as “2-in-1” devices the combined elements of traditional tablets and laptops together beneath one universal operating system. In retrospect, however, Intel was forced to place a losing bet upon the Windows horse. Qualcomm (NASDAQ:QCOM) has largely shut Intel out of the mobile market. The Snapdragon chip has remained the primary engine driving Android.

New CEO, same results

On May 2, 2013, Brian Krzanich replaced Paul Otellini as Intel CEO. The technology commentariat has speculated that Otellini was shown the door due to Intel’s missteps in the mobile market with him at the helm. Ironically, Moore’s Law has stymied Intel executives. In his 1965 technical paper, Intel co-founder Gordon Moore theorized that the number of transistors that could fit upon one particular integrated circuit would double every two years. To state the obvious, machines would become more powerful, yet smaller, over time. Moore’s Law is largely behind the secular shift away from desktop and towards mobile.

A June 4, 2014 report out of research firm comScore (NASDAQ:SCOR)presents a cross section of a mobile market literally running away from Intel. The report, titled “April 2014 U.S. Smartphone Subscriber Market Share,” actually published the averages of data taken from the first calendar quarter of 2014. A brief review of the latest comScore report would showcase the dominance of the Android – iOS duopoly above the mobile market. Taken together, Google (NASDAQ:GOOG) Android (52.5 percent share) and Apple (NASDAQ:AAPL) iOS (41.4 percent share) claimed 93.9 percent of the U.S. smartphone subscriber market. At the bottom of the heap, Microsoft and BlackBerry (NASDAQ:BBRY) are desperate to simply stay relevant within the mobile space. Microsoft Windows closed out Q1 2014 having operated a mere 3.3 percent share of American handsets. Recent estimates out of International Data Corporation would also confirm the presence of the Android — iOS duopoly above the tablet market.